{"id":460650,"date":"2011-07-14T08:03:17","date_gmt":"2011-07-14T08:03:17","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/07\/14\/government-moves-to-curb-high-inflation\/"},"modified":"2011-07-14T08:03:17","modified_gmt":"2011-07-14T08:03:17","slug":"government-moves-to-curb-high-inflation","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/07\/14\/government-moves-to-curb-high-inflation\/","title":{"rendered":"Government Moves to Curb High Inflation"},"content":{"rendered":"
\n
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\"The<\/a><\/p>\n

Yasiin Mugerwa<\/p>\n

14 July 2011<\/p>\n

\n

In an attempt to curb the increasing cost of consumer goods and salvage the weakening Shilling, the government has spelled out measures to curb rising inflation and lower the cost of doing business.<\/p>\n

State Minister for Finance Matia Kasaija told Parliament yesterday that to reduce the impact of the exchange rate and curb rising fuel prices, the government will address issues of suppliers, transport and clearance time at the border and storage facilities.<\/p>\n

“We have identified the major causes of high fuel prices as the international oil prices and structural problems in the procurement chair,” Mr Kasaija’s said. “While government cannot influence international fuel prices, bilateral discussions are in progress to deal with structural problems in procurement in Kenya.”<\/p>\n

On the proposal by the opposition to reduce taxes on petrol and diesel, the minister said such a move would not necessarily result in price reduction unless constraints such as high taxes and lack of storage facilities are addressed.<\/p>\n

According to the minister, the tax on a litre of petrol and diesel is fixed at Shs850 and Shs530 respectively.<\/p>\n

The minister also said that Bank of Uganda has stepped in to cut down on excess demand for goods and services that are driving inflation high by issuing government Treasury Bills and raising short-term interest rates so as to reduce the amount of money in circulation.<\/p>\n

Mr Kasaija said the government is hopeful that with the onset of rains in most parts of the country, inflation would be checked as new harvest of food items begin to arrive.<\/p>\n

The opposition, however, said yesterday that the proposed measures could push the poor into deeper economic crisis. “We cannot help people by using text book economics,” said the Leader of Opposition Nandala Mafabi.<\/p>\n

Mr Mafabi insisted that the solution to the current crisis lies in reducing fuel prices and curbing corruption in the immediate term. “Until they address the problem of corruption in the system, even the Shs20 billion they are talking about will also be eaten by the same people in government,” he said.<\/p>\n

Mr Kasaija announced that Shs20 billion has been provided for purchasing agricultural inputs in addition to the Shs60 billion allocated in the budget under the Agricultural Credit Scheme operated by commercial banks. This scheme seeks to help farmers to access cheap credit.<\/p>\n

The government also promises to make available funding to increase seed multiplication and will establish processing units at sub-county levels. Irrigation will also be given priority and enhancing agricultural livestock research.<\/p>\n

On plans to control capital outflows, the minister told Parliament that the investors were free to send or bank money earned in Uganda abroad.<\/p>\n

Capital flight<\/strong><\/p>\n

“Investors are free to repatriate their profits and capital depending on the business environment,” Mr Kasaija said. He added: “Imposing restrictions on the capital account to deal with a very temporary situation will hurt Uganda’s investment climate and drive away foreign investment.”<\/p>\n

Asked why the country continues to use the old and new currency notes concurrently, the minister said printing money is costly and that the process of withdrawing the old notes from circulation is gradual.<\/p>\n

As per the currency report issued by the Currency Department as of July 6, the stock of the new currency stood at Shs1.8 trillion. The stock of old currency issued in 1987 stands at Shs0.4 trillion.<\/p>\n

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State Minister for Finance Matia Kasaija told Parliament yesterday that to reduce the impact of the exchange rate and curb rising fuel prices, the government will address issues of suppliers, transport and clearance time at the border and storage facilities<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-460650","post","type-post","status-publish","format-standard"],"yoast_head":"\nGovernment Moves to Curb High Inflation - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/07\/14\/government-moves-to-curb-high-inflation\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Government Moves to Curb High Inflation - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"Yasiin Mugerwa 14 July 2011 In an attempt to curb the increasing cost of consumer goods and salvage the weakening Shilling, the government has spelled out measures to curb rising inflation and lower the cost of doing business. 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